Foreclosures in Beaufort County

I have a few friends who go to the foreclosure courts in Beaufort County. I was told by them that, the homes around here that are going into foreclosure are being bought back by the banks. What is that all about? DO the banks know something that we don't or is it that the banks have to spend all that TARP money and this is how they are doing it. There were about 30-40 foreclosures in Pine Crest that were bought back also. And people are starting to say they are selling their houses again. Anyone want to bite on this one.

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Does it mean that a bank, who didn't hold a mortgage on the house in the first place, is buying up the house? In that case, I'd probably think they are being forced to by the Feds to help clear the market and prop up prices.

But a bank that forecloses on it's own mortgagee isn't buying back the house is it? They are taking it back for non-payment, no?

Many banks don't own the homes that are mortgaged. When they initiate the mortgage with the homeowner, the banks will sell the mortgage to a larger bank like Freddy Mac, but the term "selling" is not a transfer of the equity like a person selling a car or home. The originating bank may use the mortgage paper as collateral and get like 80-90 percent of the value back to lend on other mortgages.

If the home owner forfeits, the originating banks still shows the mortgage as a liability in their balance sheet. A lot of foreclosures does not look good on their balance sheet. Not good.

So the bank may use capital to pay off the mortgage, or "buy" the home to clear it as a liability. The value of the home then appears as an asset on the balance sheet. That's good.

That's why some large banks want bail out money. They show lots of homes as liabilities. That means that they are not able to get capital from their normal sources like mutual fund companies or holding companies. Improving the balance sheet allows them to not only infuse capital from the government, but puts them back on track for their other sources.

Besides, buying homes cheap is a good investment because they will make profits when the economy improves.

Now if we rednecks can figure out a way to borrow low interest taxpayer money, we might make some profits too.

who are going to snap up the housing as an investment after seeing those "investments" get crucifed in the past two years? I don't think there will be a significant recovery and even moderate increases in values in the housing market for years to come. Until they can find a new group of stupid people to sucker into buying something either they can't afford or who believe will substantially increase in value. Bubbles usually don't repeat, at least not like belching. Tulip Mania, South Seas Bubble, Dot.com bubble come to mind.

and they declined. SunTrust. And they own my mortgage.
I wish to hell I could re-fi with someone else.
But, according to SunTrust, I don't earn enough, either for help or to get a re-fi.
It's baffling to me. I now pay my mortgage, like, an hour before it's late.
FYI, I live in The Farm.

35yearresident-Doesn't anyone understand how financing works. Number one there is no foreclosure court in Beaufort-what does happen is the property is auctioned on the courthouse steps. If someone pays more for the house then the bank is owed the difference goes to the owner(not the bank)-this happens so rarely that no one ever considers it. So the bank bids the amount of the mortgage plus any costs that are owed-this in South Carolina clears the Title and basically the old owner is no longer in the picture. Then the bank sells the property; hopefully for a profit if not then enough to keep the loss to a minimum.

Thank you so much for your information and advice. I really appreciate it. My finances lately are not solid, since I was laid off and had to take a job with much less compensation. It's getting scary, and I don't want to lose my home. My first home.
Take care.

Mama Sally it was a friends home they purchased for 204,000 it went into foreclosure and the bank bought it back for 223,000 I am sure it included the taxes and fees that were tacked on. Weezer I also have friends who have not been able to pay their mortgages and now the bank is contacting them and asking to maker a deal but when the owners were calling for help before the house was in foreclosure they could get no help it really is ridiculous out there. Now the people who are trying to get in on the lower rates cant because the home values are lower and there is not enough equity. I have a friend who is a teacher here also she relocated bought a house the market crashed the county decided not to give the teachers their raises this year and now she will soon not be able to pay her mortgage. Teachers get slave wages as it is I don't understand how Beaufort county can not give them their raises its sad how they run Beaufort and Bluffton.

That seems to be the perverted "norm". When people ask for help before the fit hits the shan, the banks and lenders don't want to help. In their words "can't". Then afterward (credit ruins, bankruptcy, etc.) they want to make deals. A little too late IMHO.

I was recommending to CW a reduction in mortgage payment, because he may be able to keep his house, which seems what he wants to do.

There are sales on this list where the Plantiff (mortgage holder) paid more than the amount owed. I don't understand this stuff either. Could it be that the Plantiff only bid what was owed to them and the total amount owed perhaps includes a 2nd mortgage to another mortgage company?

I see there is a misunderstanding of the concept of a foreclosure, so let me explain.

John goes to First Bank and borrows $100,000 to use in the purchase of a home worth $125,000.00.

Three years later, John loses his job or get divorced, or has some other financial problem and can't make the payments. The market has soured so that the house is now only worth $95,000.00. His mortgage is at $96,000.00, so he owes more on the mortgage than the house is worth.

The bank starts a proceeding to "Foreclose" John's interest in the house. The Court appoints a referee to sell the house and pay off the bank. The sale date arrives.

Now, before we go any further, understand that John owns the house, not the bank. The bank has a lien on the house, much like a bank has a lien on your car, but you still own it.

So the auction date arrives and there are 5 people bidding. The bank is entitled to recover the amount owed to them ($96,000.00) plus the costs of sale, including legal fees, advertising, and sale expenses, and any taxes or insurance that they have paid. Adding all that together, lets say that their total is $101,000.00. So, the first $101,000.00 goes to the bank, and if the sale gets more, it goes to John, because he is the owner. If there is less than $101,000.00 received, the bank may be entitled to a deficiency judgment against John for the difference. Those are very difficult to ever collect, however.

So, the high bid on the house is $60,000.00. If the bank lets it go at that price, they are out $41,000.00. Since the house is worth more than that, the bank will "BUY" the house from the referee for $61,000.00, which of course they are paying to themselves. In this case, it is considered a sale below reasonable value and the bank would have a hard time getting a deficiency judgment, because they purchased it.

So, the bidding continues and gets to $98,000.00. The bank has a choice, do they take the $98,000.00 and lose the other $3,000.00, or do they bid above the $98,000.00, buy the house, spend another sum of money fixing it up and hope to recover the total, and perhaps even make a profit? That requires knowledge of the market, the location of the house, the appraisal and an "estimate" on the part of the bank as to which is the better route.

Now, each state has their own rules as to how foreclosure is handled. What I have explained is very generic and there may be some differences between states. Some states, for instance, have a court master that sells the property instead of a referee, some states automatically allow deficiency judgments, some states allow the sheriff of the county to sell the property and take a judgment for the deficiency against other assets like cars and furniture and the like. The basic concept is the same, however. The bank is merely trying to foreclose or cut off the interest of the owner and any creditor that has a lien that was created after their lien.

And, yes, I am a retired real estate attorney, but not in South Carolina.

The SC Supreme Court has just issued an injunction preventing any further proceedings relative to foreclosures involving Fannie Mae or Freddie Mac, or any bank that has received bailout money. All pending foreclosures are on hold at this point.

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